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Financial Times and Apple negotiating App Store subscription terms

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The Financial Times doesn’t want to forfeit subscriber relationships to Apple in order to sell subscriptions through Apple’s App Store subscription service.

‘We don’t want to lose our direct relationship with our subscribers,’ said Rob Grimshaw, managing director of the FT, in an interview with Reuters on Monday. ‘It’s at the core of our business model.’

The FT, an international business newspaper and website known for its pink pages, is in negotiations to come up with a compromise that would allow it to sell subscriptions through Apple devices, such as the iPad and iPhone, while maintaining full control over subscription information.

The iPad, of which Apple has sold more than 16 million units, has driven a large amount of new subscribers to FT.com, Grimshaw told Reuters. The FT has gone from a ‘peak of 440,000 reading the print publication’ to about 590,000 subscribers in print and on FT.com, which has a website paywall similar to that of the Wall Street Journal, Reuters said.

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A main point of contention between Apple and various publishers is that Apple gives subscribers options as to what private information they want to share with publishers, including name, e-mail address and ZIP Code.

By making all this information optional to share with publishers, publishers will likely see a drop in how much subscriber information they get through Apple -- valuable information they use to target ads and determine who makes up their readership.

Apple would process the payments and take a 30% cut of all subscription revenue for purchases made through the Apple App Store or within an iPad, iPhone or iPod app. Publishers can set their own subscription prices and the length of the subscription term, but Apple requires that the iOS prices meet the lowest digital prices available outside of the App Store.

Before Apple’s subscription service, publishers had to sell their content one issue, video, song or album at a time.

Grimshaw told Reuters that the FT has a ‘great relationship with Apple’ and that he hopes an agreement will be reached that works for both companies. But the news outlet also seems prepared to look to other platforms for digital subscriptions if need be.

‘If it turns out that one or another channel doesn’t mix with the way we want to do business, there’s a large number of other channels available to us,’ he told Reuters.

Apple officials were unavailable for comment on the negotiations on Tuesday morning.

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-- Nathan Olivarez-Giles

Twitter.com/nateog


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